Updated from 8:56 a.m. EDT with conference call details and stock price.
That's because for the second straight quarter the mid-tier department store has managed to rise above the dreadful performance of its struggling peers. In large part that is thanks to J.C. Penney emphasizing affordable apparel and shoe prices in its marketing, and stocking stores with cheap private-label goods such as St. John's Bay under CEO Marvin Ellison.
J.C. Penney reported Friday that second-quarter same-store sales rose 2.2%, relatively in line with Wall Street forecasts. Gains were achieved in all months of the quarter, Ellison told analysts on a call. Top-performing businesses included Sephora cosmetics, home goods, footwear and handbags, while online sales also rose. Customer traffic increased, bucking the continued declines being felt across the bricks-and-mortar retail space.
The company expects its same-store sales to strengthen in the second half of the year compared to the first six months, as it benefits from the roll-out of appliances, flooring and new Sephora locations. Excluding one-time items, J.C. Penney's adjusted loss tallied 5 cents a share. Analysts expected a loss of 15 cents a share.
Shares traded down a fraction of a percentage point in morning trading but eventually ticked higher in afternoon trading to $10.31.
The company reiterated its full-year same-store sales growth target of 3% to 4% and expected earnings before interest, taxes, depreciation and amortization of about $1 billion.
"We feel really good about the trajectory of our business. The onus is on the retailer to give people reasons to shop," said Ellison during an analyst conference call.
Ellison's peers are still having trouble enticing people to shop, or so it seems.
Macy's (M) - Get Report reported earnings, excluding one-time items, of 54 cents a share compared to Wall Street forecasts for 45 cents a share. Same-store sales fell 2%. Taking a back seat to the stronger-than-anticipated earnings were details of a new plan by Macy's to close 100 stores, or almost 15% of its current 728 locations, by early 2017. The company plans to take the savings from operating these low-volume stores and reinvest them in its top-performing locations.
At Kohl's (KSS) - Get Report , second-quarter same-store sales fell 1.8% and were below the company's plan, due in large part to a 5% plunge in customer traffic. Kohl's subsequently took a sledgehammer to its full-year profit outlook, despite its monster 19-cent earnings beat. Executives now expect earnings in a range of $3.80 to $4.00 a share for the year, down from $4.05 to $4.25 a share previously.
Weak second-quarter sales for Kohl's and Macy's come on the heels of a steady drumbeat of dreary commentary from department store suppliers this week.
"As U.S. department stores' business continues to be soft, the wholesale channel proved to be the largest driver of our [sales] decline during the [second] quarter," Fossil (FOSL) - Get Report Chairman and CEO Kosta Kartsotis told analysts on a call Tuesday evening. "We also expect the challenging retail environment to persist. Weaker performance in our wholesale channel, particularly in the U.S., where the business is most challenged, is likely to continue."
Kartsotis' comments come in light of the watchmaker reporting an 11% plunge in second-quarter sales in its Americas division, fueled in large part by tepid demand for watches within department stores such as Macy's and Kohl's.
The scene at department stores for Ralph Lauren (RL) - Get Report was also poor during the quarter, with the company warning of continued traffic challenges. Executives promised to slash inventory to department stores in a bid to reduce aggressive discounting.
Meanwhile, the tone from the handbag makers that dominate sizable portions of department stores hasn't been any better.
This quarter brought "a continued decline in mall traffic trends as well as a decrease in tourism in certain major cities, which negatively impacted our comparable sales performance during the quarter," said Michael Kors (KORS) Chairman and CEO John Idol on Wednesday. Michael Kors saw sales in its Americas wholesale segment -- which is mostly comprised of business at U.S. department stores -- nosedive 8.7% during the second quarter.
The department store sector has been so unsettled in recent months that Michael Kors rival Coach (COH) decided to shutter about 25% of its North American department store locations -- otherwise known as wholesale locations.
"Despite a potential warm-weather [sales] boost in June and July, we're still seeing signs U.S. department stores are struggling," wrote Morgan Stanley analyst Kimberly Greenberger in an Aug. 2 note. She added, "We don't think spending accelerates in the back half of the year, particularly at the high end, given rising macroeconomic uncertainty and the upcoming presidential election."